57144 ch15 470 493 - jones & bartlett · pdf filelearning objectives and activities ......

RISK MANAGEMENT ANDLEGAL ISSUESValorie Dearmon, RN, MSN, NEA, BC15

Q U O T E

The only real mistake is the one from which welearn nothing.

—John Powell

CONCEPTS

Torts, civil and criminal law, negligence, malpractice, defamation, slanderand libel, assault and battery, false imprisonment, standard of care, respon-deat superior.

LEARNING OBJECTIVES AND ACTIVITIES

• Describe laws impacting health care.• Differentiate among the elements of a risk management

program.• Identify the risks professional nurses face regarding mal-

practice and other torts.• Outline a plan for professional nurses to use to reduce

the risks of legal actions.

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NURSE MANAGER BEHAVIORS

Ensures compliance with the regulatory agency standards and policies ofthe organization; participates in the review of clinical policies and proce-dures; supports a nonpunitive reporting environment and rewards staff forreporting unsafe practices; ensures that unit staff is clinically competentand trained; identifies areas of risk/liability; encourages/requires prompt re-porting of potential liability by unit staff at all levels; envisions and takesaction to correct identified areas of potential liability; ensures that unit staffis educated on risk management and compliance issues.

NURSE EXECUTIVE BEHAVIORS

Articulates patient care standards as published within professional litera-ture; understands, articulates, and ensures compliance with the regulatoryagency standards and policies of the organization; ensures that organizationclinical policies and procedures are reviewed and updated in accordancewith evidence-based practice; possesses knowledge of and dedication topatient safety; designs safe clinical systems, processes, policies, and proce-dure; supports a nonpunitive reporting environment and a reward systemfor reporting unsafe practices; ensures staff is clinically competent andtrained on their role in patient safety; identifies areas of risk/liability; en-sures staff is educated on risk management and compliance issues; devel-ops systems that encourage/require prompt reporting of potential liabilityby staff at all levels; envisions and takes action to correct identified areasof potential liability.

Introduction

One could easily say that health care today is “risky business.” In 1999 a seminal report was releasedfrom the Institute of Medicine indicating that medical errors contribute to the deaths of 44,000 to98,000 hospitalized patients each year. It further indicated that more patients die each year from ad-verse events associated with health care than expire from automobile accidents (43,458), and thatdeaths resulting from medical errors surpass the number of deaths related to breast cancer, the eighthleading cause of death in the United States.1 The report shook the public and healthcare communityand generated a call for action. The Institute of Medicine report suggested that 90% of errors resultfrom failures in the system and are not the blame of individuals.2 Therefore a massive campaign waslaunched to increase patient safety through the transformation of complex systems within healthcareorganizations. Despite enormous efforts by both private and governmental organizations to transformwork environments and to improve patient safety, mistakes continue and the number of legal claimsagainst healthcare providers continues to soar.3 Inevitably, rendering patient care in imperfect work en-vironments with broken systems and by humans (who are fallible) affords multiple opportunities for mishaps and misunderstandings. Given the complexities of health care today, managing risk posesmajor challenges for those in positions who lead. It is essential that nurse managers and executives

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possess a basic understanding of the law pertaining to health care and that every effort be made to in-stitute safeguards for the protection of the public, employees, and organization.

LAW IMPACTING HEALTH CARE

There are two distinct divisions of the law within the United States: criminal (public) and civil (pri-vate). In health care, both criminal and civil law apply, with the preponderance of litigation being civilin nature.

Civil Law

Civil law pertains to a wrongdoing between individuals or between an individual and the state, exclud-ing criminal acts. In a civil case, defendants are found liable as opposed to guilty and are directed to paymonetary compensation for economic (financial loss) and or noneconomic damages (pain and suffer-ing). Tort law, which addresses transgressions of one individual on the legal rights of another, is thefoundation of civil law. There are two types of tort: unintentional and intentional.

Unintentional Torts

An unintentional tort or negligence may occur as a result of carelessness or accident and focuses on in-jury or harm. Unintentional torts are the basis of malpractice suits.

Negligence Negligence is a part of tort or personal injury law and is defined as “a failure to use thatdegree of care that any reasonable and prudent person would use under the same or similar cir-cumstances.”4 If a professional, such as a physician or nurse, is negligent while acting in his or herprofessional capacity, the term is coined medical negligence or malpractice. To recover damages whennegligence is alleged, the burden of proof lies with the plaintiff to demonstrate each of the followingfour elements:

1. A legal duty to provide reasonable care2. A breach of duty (an act or a failure to act)3. Injury to another4. Breach of duty must be the proximate (immediately related) cause of the injury

Generally speaking, anyone or any agency is susceptible to a suit for negligence for just about any act or omission. Theessence of a negligence claim is that one’s conduct fell below theexpected care and the failure resulted in injury. Being named ina lawsuit does not mean that wrongdoing has occurred, and in-jury does not necessarily indicate that someone was at fault.

Medical Malpractice Medical malpractice is “negligence on the part of a professional only while heor she is acting in the course of professional duties.”5 Malpractice contends that

1. One’s conduct did not meet the expected professional standards or fell below the “standard ofcare,” and

2. The failure caused harm to a patient.

472 CHAPTER 15 Risk Management and Legal Issues

“Rendering patient care in imperfect work environments with broken systems and by humans (who are fallible) affords multiple opportunities for mishaps and misunderstandings.”

“Being named in a lawsuit does not meanthat wrongdoing has occurred, and injury doesnot necessarily indicate that someone was atfault.”

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Malpractice cases begin with an incident of alleged negligence and alleged injury. The injured party(plaintiff) retains an attorney and files a lawsuit against another (defendant). The plaintiff could be thepatient, the patient’s family, or a legal guardian. Depending on the allegations, there may be multipledefendants in the same lawsuit, including one or more hospitals, physicians, nurses, or others.

Medical malpractice is a serious concern for the healthcare industry. The Agency for HealthcareResearch and Quality defines medical errors as “mistakes made in the process of care that result in orhave the potential to do harm to patients.”6 Numerous reports indicate that medical errors are com-monplace. Following a review of 30,000 medical records of patients discharged from 51 New York hos-pitals, a research team at Harvard University found that 3.7% of those hospitalized suffered adverseevents, with 27.6% of the adverse events attributed to negligent care.7 These findings are similar toother studies across the nation. Despite the high frequency of medical errors, only 1 of every 7.6 pa-tients injured as a result of negligence file lawsuits, and even a smaller number receive compensationfor injuries.8 Furthermore, most individuals who file a malpractice suit have suffered a genuine injuryor loss; thus a common belief that most lawsuits are fraudulent is unfounded.9

Malpractice lawsuits continue to escalate. The following cases represent a small sampling of med-ical malpractice events. In Monk v. Doctor’s Hospital, the facility and physician were found negligentwhen a Bovie plate was inappropriately applied during surgery, resulting in a patient burn.10 In anAlabama case, two nurses testified that they did not know a decubitus ulcer could be life threateningand a third nurse claimed ignorance in the need to call the doctor for symptoms of an infection. Aftertheir testimonies, the nursing facility employing these nurses was found negligent in providing train-ing and supervision. The suit led to a judgment of 2 million dollars in damages for the plaintiff.11 InLloyd Noland Hospital v. Durham, the court ruled against the hospital when staff failed to administer astanding order of preoperative antibiotics to a patient.12 Regrettably, the stories go on and on.

In many industries mistakes do not produce grave consequences, leaving organizations with morelatitude to view errors as learning opportunities. However, in a business where one delivers quite per-sonal and commonly invasive care to human beings, mistakes can have devastating and irreversibleeffects for those served. Healthcare leaders are in a difficult position of attempting to balance the mul-titude of good that occurs from the care and services provided to the majority with the potentially se-rious consequences of negligent incidents. The challenge to keepa “stiff upper lip” is tough when the reports of medical errorstarnish the reputation of the industry. Press releases and per-sonal experiences continue to shake the confidence of health-care consumers. In a recent national survey, findings revealedthat 55% of participants were dissatisfied with the care theyreceived and 34% reported that either they or a family member experienced a medical error.13 Thesetype of findings describe why today the public is more skeptical and leery of healthcare services andproviders.

The latest reports on malpractice claims indicate that the incidence of nurses personally named inlawsuits is greater now than ever before. According to the National Practitioner Data Bank, malpracticepayments for nurses increased from 253 in 1998 to 5,567 in 2005.14 These numbers do not reflect theincidence of nurses involved in lawsuits covered under the doctrine of corporate liability, which holdsorganizations responsible for the practice of all those within their walls.

In a review of more than 350 cases between 1995 and 2001, Croke identified six key areas for nurs-ing negligence15 summarized as the failure to

1. Follow standards of care2. Use equipment in a responsible manner

Law Impacting Health Care 473

“The latest reports on malpractice claims in-dicate that the incidence of nurses personallynamed in lawsuits is greater today than everbefore.”

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3. Communicate4. Document5. Assess and monitor6. Act as a patient advocate

Patient falls and medication errors continue to be leading incidents for nursing malpractice lawsuits.Identifying and implementing practices to improve patient safety is a priority in healthcare settings.

Standard of Care The American Nurses Association describes a standard as an “authoritative state-ment defined and promoted by the profession by which the quality of practice, service or education can


Note: This table includes only disclosable reports in the NPDB as of the end of the current year. Voided reports have been excluded.Medical malpractice payment reports that are missing data necessary to determine the malpractice reason (8 reports for RNs) are ex-cluded.*Reporting using the “Advanced Nurse Practitioner” category began on March 5, 2002. The “Advanced Nurse Practitioner” category waschanged to “Clinical Nurse Specialist” on September 9, 2002. Prior to March 5, 2002, these nurses were included in the “RN (ProfessionalNurse)” category.**The “Behavioral Health” category was added on January 31, 2004. Reports involving behavioral health issues filed before January 31,2004 used other reporting categories. Cumulative data in this category includes only reports filed after January 31, 2004.

TABLE 15-1 NATIONAL PRACTITIONER DATA BANK, 2005 ANNUAL REPORT

AdvancedRN Practice Nurse/

Malpractice (Professional) Nurse Nurse Nurse Clinical Nurse Reason Nurse Anesthetist Midwife Practitioner Specialist* Total

Anesthesia related 128 915 1 8 1 1,053

Behavioral health related** 3 1 0 1 0 5

Diagnosis related 229 17 39 219 1 505

Equipment or product related 55 6 0 4 0 65

IV or blood products related 161 14 0 2 0 177

Medication related 555 29 3 62 1 650

Monitoring related 695 17 15 24 0 751

Obstetrics related 376 7 413 28 0 824

Surgery related 361 63 9 12 1 446

Treatment related 677 33 35 119 5 869

Miscellaneous 204 5 1 12 0 222

All reasons 3,444 1,107 516 491 9 5,567

Number of Medical Malpractice Payment Reports by Malpractice Reason—Nurses (Registered Nurses, NurseAnesthetists, Nurse Midwives, Nurse Practitioners, and Advanced Practice Nurses/Clinical Nurse Specialists)

National Practitioner Data Bank (September 1, 1990–December 31, 2005)

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be evaluated.”16 Nursing standards of care identify the skill level and knowledge of the professional andthe expected level of care given a similar setting and under similar circumstances.17 The standard ofcare or “customary practice” is the benchmark for measuring malpractice. The standard of care is com-monly referenced in legal and nursing literature; however, if you ask most nurses to define the standard,the request tends to elicit a blank stare, at least momentarily. This is because the standard of care is notalways easy to articulate. It is based on the circumstances surrounding the adverse event and the ex-pected care of the “average” practitioner. If that were not complicated enough, add the uniqueness ofindividual patient needs and one can see why many times even experts have varying opinions about thestandard. References such as standards and positions published by professional organizations, nursepractice acts, nursing texts, and other sources may be considered authoritative or “black lettered”reference materials and may be used to help clarify the standard. However, in a profession that holisti-cally cares for the human elements of individuals, including the psychological, social, and physical


Note: This table includes only disclosable reports in the NPDB as of the end of the current year. Voided reports have been excluded. Medical malpracticepayment reports that are missing data necessary to determine the malpractice reason (8 reports cumulatively) are excluded.**The “Behavioral Health” category was added on January 31, 2004. Reports involving behavioral health issues filed before January 31, 2004 used otherreporting categories. Cumulative data in this category includes only reports filed after January 31, 2004.

TABLE 15-2 NATIONAL PRACTITIONER DATA BANK, 2005 ANNUAL REPORT

Mean and Median Medical Malpractice Payment Amounts by Malpractice Reason, 2005 and Cumulative through 2005—Nurses (Registered Nurses, Nurse Anesthetists, Nurse Midwives, Nurse Practitioners, and Advanced PracticeNurses/Clinical Nurse Specialists)

National Practitioner Data Bank (September 1, 1990–December 31, 2005)

Cumulative through 2005

2005 Only Actual Inflation-Adjusted

Number of Mean Median Number of Mean Median Mean MedianMalpractice reason Payments Payment Payment Payments Payment Payment Payment Payment

Anesthesia related 68 $368,594 $110,938 1,053 $261,779 $100,000 $309,042 $123,867

Behavioral health related** 3 $236,667 $60,000 6 $126,851 $37,500 $127,062 $37,810

Diagnosis related 80 $263,207 $100,000 504 $290,458 $125,000 $335,067 $140,494

Equipment or product related 6 $64,002 $61,695 65 $155,682 $40,000 $193,125 $43,667

IV or blood products related 6 $102,500 $67,500 177 $222,399 $75,000 $264,523 $79,332

Medication related 62 $406,830 $87,500 650 $267,366 $62,500 $306,440 $70,087

Monitoring related 97 $267,559 $100,000 751 $297,705 $95,000 $345,137 $107,040

Obstetrics related 90 $675,032 $288,750 824 $533,086 $249,832 $598,187 $264,483

Surgery related 52 $124,505 $60,000 446 $148,716 $50,000 $173,544 $55,471

Treatment related 99 $192,159 $75,00 869 $168,650 $50,000 $191,070 $61,934

Miscellaneous 23 $95,952 $47,500 222 $237,216 $40,000 $268,997 $49,547

All reasons 586 $319,905 $100,000 5,567 $282,821 $90,000 $324,929 $102,482

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components, these publications alone may not adequately define the standard of care. Furthermore,many traditional practices in nursing viewed as standard care have yet to undergo the rigor of scien-tific study and thus are not based on evidence. It is generally the culmination of many sources coupledwith practice norms that establishes the standard.

Expert Nurse Witness Because of the complexity of circumstances framing most alleged medicalmalpractice events, frequently an expert witness is called on to help the jurors interpret the appli-cable standard of care. Expert witnesses serve as agents in the legal process and are selected based on their experience in the specialty field and knowledge of the subject in question. Experts are askedto review the facts of the matter and to provide an opinion as to whether the care rendered by thedefendant(s) met the ordinary or customary standard of practice. The expert is asked to testify re-garding whether the care provided to the patient met the minimal requirement mandated by law,not the optimal level of care. Nurses are commonly asked to serve as expert witnesses by both de-fense or plaintiff attorneys. A nursing expert may be retained by an attorney to serve as a consultantor to give sworn testimony and generally receives payment for performing one or more of the fol-lowing functions:

• Review records, charts, and depositions of other witnesses and give an opinion based on expertknowledge of standards related to the nursing care rendered to the patient at the center of the suit.Details of records and depositions are reviewed thoroughly to ensure understanding of the facts.

• Write a report of the review findings, sometimes referred to as a “downside review.” When the ex-pert is anticipated to testify, written critiques of the findings are discouraged because these maynot be protected and thus admissible as evidence in the case.

• Perform a literature review for relevant information pertaining to the facts of the case.• Testify under oath in deposition and at trial. In the event of testimony, the retaining attorney

works closely with the expert in preparation for the deposition or trial. Giving sworn testimonycan be stressful for the expert as the opposing attorney attempts to confuse the witness and di-minish the expert’s credibility. A nurse serving as an expert should take the responsibility of therole seriously and abide by an ethical code of conduct. Experts should rely on formal educationalknowledge and experience to form opinions and should never adopt the opinion of others.

Nurses are qualified as an expert nurse based on formal education, licensure as a registered nurse,and experience. Nurses may become certified as legal nurse consultants through several accrediting or-ganizations; however, certification is not a requirement to serve as an expert witness. Whether certifiedor not, preferred experts have published in peer-reviewed journals, possess the ability to speak convinc-ingly and in language that a jury can understand, maintain good eye contact, have a record of accept-ing cases from both plaintiffs and defendants, and participate in professional organizations. Thefollowing case study describes a situation in which the testimony of an expert witness influenced thedefense of the nursing care provided to an elderly patient.


Case StudyA Nurse Expert Witness Testified to the Nursing Standard An elderly, blind,

female patient in a hospital in Alabama fell and broke her hip. The family sued the hospital for negli-

gence. The patient’s chart indicated that the nursing personnel had planned her care with the patient

and arranged the furniture in her room, including the position of her bed, so she could safely go to her

chair and to the bathroom. It was the decision of the nursing personnel to leave the side rail at the foot

of the bed nearest the bathroom down. The nursing personnel had documented that the patient was

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Medical Malpractice Tort Reform Few issues in health care ignite as much emotion as the debates overmedical malpractice. Over the last 30 years, states throughout the nation have experienced varying degreesof malpractice crisis. State legislators have intervened by enacting a number of laws known as tort reformto address issues such as the unavailability of insurance, rising premiums, and enormous pay outs. Sincethe mid-1970s the crises have calmed and resurged on numerous occasions. Once again, however, the fre-quency of claims and the size of pay outs are increasing. The latest tort crisis is characterized by both de-creasing availability of medical malpractice insurance and rising premiums. Factors contributing to thecrisis of today include increased public awareness of errors in health care, decreased confidence and trustamong patients, advances in technology and increases in the intensity of medical services, higher expec-tations of the public, and less willingness of plaintiff lawyers to accept settlement offers.18

Patient Safety and the Tort System Is the quest for patient safety and the current tort system com-patible? Although evidence indicates that most errors are attributed to system error rather than theprovider of care, society continues to punish practitioners for errors. The medical liability systemappears to be in direct conflict with efforts of regulatory agencies, employers, and professionalorganizations attempting to change punitive cultures into cul-tures that discuss and analyze errors and redesign systems.19

Although plaintiff lawyers argue that the threat of litigation im-proves patient safety, the “punitive, individualistic, adversarialapproach of tort law is antithetical to the non-punitive, systems-oriented, and cooperative strategies promoted by leaders of thepatient-safety movement.”20 Physicians are hesitant to disclosemedical errors or to participate in activities to improve patientsafety for fear of legal action.21 Obviously, the tort system as weknow it today is in need of restructuring to decrease reluctanceof physicians and other healthcare professionals and organizations to fully disclose errors and to par-ticipate in patient safety initiatives without fear of retaliation.

Intentional Torts

An intentional tort is a conscious decision to commit or omit an act and to either intend the result orto possess reasonable knowledge of the foreseeable consequences. Intentional torts that nurses may faceinclude defamation, false imprisonment, and assault and battery, among others. Intentional torts pos-sess all three of the following elements:23

1. An act that infringes on the rights of another with foreseeable consequences by the defendant2. The individual carrying out the act or omission must deliberately intend the consequences3. The consequences must be directly caused by the intended act or omission


instructed to call for assistance, if needed. The patient complied with instructions and for several days

safely ambulated to the bathroom without incident.

The plaintiff’s lawyer argued that all four side rails should have been up on the bed and that the pa-

tient should have been instructed to call nursing personnel before getting up for any reason. The ex-

pert testified that nurses make ongoing judgments about the safety and well-being of patients and in

this case assessed the patient to be safe to ambulate to the bathroom alone. Furthermore, the docu-

mentation and testimony of nurses indicated that the patient had been compliant with instructions and

repeatedly demonstrated the ability to safely ambulate. Based on the expert’s testimony, the jury ruled

in favor of the hospital.

“Although plaintiff lawyers argue that thethreat of litigation improves patient safety, the‘punitive, individualistic, adversarial approachof tort law is antithetical to the non-punitive,systems-oriented, and cooperative strategiespromoted by leaders of the patient-safetymovement.’” 22

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Defamation Defamation is the issuance of a false statement about another person, which causes thatindividual to suffer harm. Libel involves the making of defamatory statements in a printed form, suchas a magazine or newspaper. Slander, on the other hand, involves defamatory statements by oral repre-sentation. An example of slander is a malicious statement by a nurse that falsely accuses a patient or an-other individual of having an infectious disease or to be of immoral character. A person who defamesthe character of another and causes a loss of professional reputation must be able to prove the truth of

the accusation. Truth is the absolute defense of an action in slan-der and libel. Claims of defamation are rare in health care.

False Imprisonment False imprisonment is the unlawful re-straint of someone that affects the person’s freedom of move-ment. False imprisonment could be alleged due to confinementby a locked door, physical restraint, chemical restraint, or even

by the threat that force may be used. Recovery from a lawsuit based on false imprisonment includesdamages for physical and psychological harm.

Years ago, it was common to see elderly people positioned in wheelchairs by vests or belt restraintsto keep them from moving around independently. Today, it is possible that the application of restraints,unless used for medical reasons and in compliance with federal law or The Joint Commission (TJC)standards, may be interpreted as false imprisonment.23 Strict guidelines exist in inpatient settings thatdefine the appropriate use of restraints and seclusion along with required monitoring of those con-fined. Nurses should carefully adhere to these policies.

False imprisonment may also be alleged if an individual is prevented from leaving a facility by usingrestraint or coercion. There are legitimate reasons for detaining individuals that are legally justified.These include patients who are mentally incompetent or impaired and patients who are a threat tothemselves or to others. In the event that there is question about the safety and well-being of a patientwho desires to leave a facility against advice or when concern exists for another’s welfare, legal adviceshould be sought immediately.24

Assault and Battery Assault is an intentional threat to inflict injury upon a person by another whohas the ability to cause harm and thus puts the person in fear of an immediate danger. Battery is theintentional touching of or application of force to another person, in a harmful or offensive manner, and

without consent. The most commonly alleged act of batteryagainst nurses is the treatment without consent.

In the case of Roberson v. Provident House, a nurse inserted acatheter following a physician’s as needed (PRN) Foley order.25

The patient did not want to be catheterized and protested. Thenurse was found to have committed assault and battery. Nursesmust obtain permission from the patient before touching thepatient. The consent procedure does not have to be formal andmay be implied such as when the patient holds his arm out forthe start of an intravenous line. Litigation regarding the re-

quirement for informed consent has focused around the physician’s failure to explain the risks, ben-efits, and alternatives to the procedure. However, hospitals and nurses may be held liable for lack ofinformed consent if they know or should have known there was not adequate disclosure or adequateconsent.

How would you like to be in this circumstance? An older slightly confused patient is admitted to amedical-surgical unit for severe anemia of unknown etiology. The elderly man’s appearance is un-kempt. He has a scraggly beard consisting of long matted hair. A conscientious nurse, with good inten-


“A person who defames the character of an-other and causes a loss of professional reputa-tion must be able to prove the truth of the ac-cusation. Truth is the absolute defense of anaction in slander and libel.”

“A nurse who carries out any nursing inter-vention without the patient’s consent, even ifthe intervention is beneficial, is potentiallyguilty of professional misconduct. The nursemay be disciplined by the state board of nurs-ing and could be sued by the patient or face anallegation of assault and battery.”

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tion, decides to place the patient in the shower and thoroughly “scrub” the patient. After the bath, shetrims his beard. When his son arrives, the son is irate about the beard being trimmed. The patientbegins crying and accuses the nurse of restraining his hands while she cut his beard. He claims that de-spite his protests she continued to cut his beard. As innocent as the nurse may have been in this situa-tion, claims of battery occurred. Fortunately, in this case, a letter of apology soothed this patient andson’s ruffled feathers.

Criminal Law

Criminal law applies to an intentional wrongdoing against society as well as to an individual victim.A criminal offense is prosecuted by the state in which it occurs or by the U.S. Department of Justice.Crimes are defined as either misdemeanors or felonies. A misdemeanor is less serious than a felony,and guilt is generally punishable by fines or imprisonment for less than a year.26 A felony such as rapeor murder is punishable by confinement in a penitentiary for longer than 1 year.27 Although lesscommon than civil claims, healthcare providers have beenaccused of criminal negligence. Criminal negligence is anaction that is considered to be “a reckless disregard for thesafety of others.”28

One of the earliest and most famous cases of criminal negli-gence by a nurse is the Somera case, reported in The Inter-national Review (July 1, 1930, pp. 325–334). Lorenza Somera, asthe head nurse, was directed by the operating surgeon to prepare 10% cocaine with adrenaline foradministration to a patient for a tonsillectomy. Ms. Somera repeated and verified the order. A few mo-ments after the injection was given, the patient showed symptoms of convulsions and died. The oper-ating surgeon meant to say 10% procaine. Only Ms. Somera was found guilty of manslaughter due tonegligence. The negligence consisted of following an order that the nurse should have known by rea-son of her training and experience was incorrect. Although the physician was negligent, the cause ofdeath was the nurse’s negligence.29 According to the American Nurses Association’s Code of Ethics forNurses with Interpretive Statements, “Nurses are accountable forjudgments made and actions taken in the course of nursingpractice, irrespective of healthcare organizations’ policies orproviders’ directives.”30

In 1997, when a patient bled to death, a court in New Jerseycharged five nurses with endangering the welfare of a patient.During the same year, in Colorado, three nurses were indicted for criminal negligence in the death of a newborn after an overdose of 10 times the prescribed amount of penicillin. In 2004, criminalcharges were filed against an emergency room nurse who failed to report suspected child abuse for a 2-year-old boy. The child subsequently died at the hands of his stepfather. In Wisconsin, a nurse wascharged with a felony after mistakenly administering an epidural anesthetic intravenously instead ofthe prescribed order of penicillin. The Wisconsin nurse failed to read the medication label carefully andneglected to follow the established bar code policy. These cases have raised serious concerns for nursesand other healthcare providers who are today exposed to both civil and criminal litigation for errors ormisjudgments.

CORPORATE LIABILITY

Healthcare corporations are incorporated by the state and designated as either for-profit or not-for-profit. Not-for-profit organizations are exempt from federal taxes and, in most cases, state taxes. Theyalso qualify for donations and charitable deductions.31

Corporate Liability 479

“Although less common than civil claims,healthcare providers have been accused ofcriminal negligence. Criminal negligence is anaction that is considered to be ‘a reckless dis-regard for the safety of others.’”

“Nurses are accountable for judgments madeand actions taken in the course of nursingpractice, irrespective of healthcare organiza-tions’ policies or providers’ directives.”

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Board of Directors/Chief Operating Officers

Every institution is governed by a board of directors that has responsibility for the operation and via-bility of the institution. With the authority awarded a governing board, the board and its personalmembers have specific legal responsibilities and liabilities. The board and its members are accountablefor the overall management of the institution. A chief operating officer is appointed by the board tocarry out daily operations. The board reviews financial reports, approves strategic plans, and monitorsinternal operations. Furthermore, the governing body has the ultimate authority and responsibility toselect medical staff. 32

High ethical conduct is required of board members. Generally, strict rules of conduct are imposedon members to avoid conflicts of interest and self-gain. The members of the board are responsible foroperating the organization in compliance with state, federal, and local laws. A case demonstrating howthose in governing positions can face penalties when laws are not adhered to is that of People v. CasaBlanca Convalescent Homes. In this case the court found multiple violations of statutory regulations, in-cluding deficient staffing and inadequate care of residents. The operator of the facility was fined a sig-nificant amount for failure to comply with regulations.33 Other instances of violations of the law haveled to criminal prosecution.

Corporate Negligence

For years, hospitals and medical centers remained immune from liability for medical acts. With the ero-sion of charitable and governmental immunity, however, hospital risk for exposure increased. Under adoctrine of corporate law, hospitals are legally responsible for the safety and security of patients, em-ployees, and visitors. The doctrine creates a duty of the hospital itself, directly to the patient. Thus hos-pitals cannot abdicate the responsibility to a third party. With a duty specific to the patient, hospitalsare responsible to monitor the personnel involved in the processes within the organization, assess theoverall operation of the facility, and make a conscious effort to identify potential risks. Corporate lawin most states includes the following four duties:

1. The duty to use reasonable care in maintaining safe and adequate facilities and equipment2. The duty to formulate adequate policies to ensure quality care for patients3. The duty to oversee all persons who practice within its walls4. The duty to select and retain competent physicians and staff

Respondeat Superior

The legal doctrine, respondeat superior, holds the employer responsible for torts committed by employ-ees while on the job.34 Darling v. Charleston Community Hospital, a landmark case, opened the door tocorporate negligence liability of hospitals.35 The case involved a young college football player who, afteran injury, lost his leg after traction and cast application. Despite obvious signs of circulatory impair-ment and numerous attempts by the patient and family to seek assistance from staff, no remedial stepswere taken. Although the patient was seen daily by a staff doctor, the court found the hospital negligentfor not ensuring that the nurses reported important findings to physicians and notified supervisorypersonnel in the event that the doctor failed to act.36

As with physicians, hospitals are facing ever-increasing medical malpractice claims. The cost of hos-pital malpractice liability premiums are on the rise and can have a significant impact on operatingfunds. According to the Institute of Medicine, 54% of healthcare workers are nurses; therefore nurseshave heightened opportunity for claims.37 As indicated by the American Organization of Nurse Exec-utives, an important skill for nurse managers is human resource leadership. Determining and provid-


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ing for educational needs, assessing competency, appropriate evaluation, and having “crucial conversa-tions” are key to enhancing patient safety and minimizing organizational liability.

Credentialing Liability

Corporate responsibility extends beyond the hospital’s obligation to ensure sound management prac-tices, safe operations, and appropriate behavior of employees and agents to liability for clinical compe-tence and performance of all practitioners granted clinical privileges. As part of the credentialingprocess of any healthcare facility, organizations are responsible to appropriately investigate the qualifi-cations and background of licensed independent practitioners applying to practice within the orga-nization. Licensed independent practitioners are defined by the The Joint Commission (TJC) as “indi-viduals permitted by law and by the organization to provide care and services without direction orsupervision.”38 The TJC requires verification of licensure and credentials, work experience, and qualityof care and encourages institutions to be thorough and deliberate when granting privileges.39 Hospitalsare mandated by law to query the National Practitioner Data Bank before granting physician privilegesto practice within the facility and to recheck the file of healthcare practitioners every 2 years thereafter.The National Practitioner Data Bank, a nationwide tracking system, was established by federal lawin1986 and formally inaugurated in 1990 to flag those who engage in unprofessional behavior and torestrict incompetent physicians and other healthcare practitioners from moving state to state withoutdisclosure or discovery of previous medical malpractice payment and adverse action history.40

A landmark case in which a surgeon operated on a hip, injuring the femoral artery and nerve andcausing permanent damage and paralysis, was the first legal case where a hospital was held liable fornegligent credentialing.41 A closer look at the physician revealed suspension from other hospitals andinvolvement in other cases of malpractice. The court held that hospitals have a duty to responsibly se-lect medical staff.

Nurses who are victims of or who witness inappropriate behavior of a licensed independent practi-tioner are responsible to report such behavior. The same is true when a nurse observes competency is-sues. Nurse executives, as advocates for both the patient and staff, are expected to confront and addressthe matters utilizing processes defined within the organization to deal with behavioral or clinical per-formance matters.

OTHER AREAS OF LIABILITY FOR NURSES

Supervisor Liability

In 1994 the U.S. Supreme Court defined a nursing supervisor as a nurse who assigns, oversees, and pro-vides direction to licensed or unlicensed personnel. This definition not only exposes nurses in formalsupervisory positions to supervisory liability but expands the legal responsibility to staff nurses, partic-ularly those who assume the responsibility of charge nurse. The “supervisor” may be found negligentif failing to assign or supervise appropriately. Furthermore, the corporation, under the doctrine of re-spondeat superior, is liable for the actions of both the nurse performing the assigned care and the nursemaking the assignment.

Inadequate Staffing

Nursing facilities are responsible under federal law to provide adequate staffing.42 Adequate staffingincludes a sufficient number of competent staff to reasonably ensure safe care. An important nurseexecutive competency identified by the American Organization of Nurse Executives is the appropri-ate allocation of nursing resources based on patient acuity. This can be a major challenge for nurse

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administrators and other healthcare leaders of today, as organizations compete for dwindling numbersof healthcare providers.

Floating

Floating is common necessity in times of high acuity or short staffing. Floating has implications forboth the nurse who is floating, the personnel reassigning the nurse, and the nurse delegating patientcare to the floating nurse. The nurse who is being assigned to float has a professional duty to the or-ganization and the patient to accept the assignment unless the nurse is lacking education and skill toperform the assigned duties. The nurse is obliged to provide for patients’ safety. In extreme staffingcircumstances, abandoning patients may potentially jeopardize patient care and safety. In these in-stances, “a nurse lacking in certain skills and experience is preferable to the patient lacking a nurse.”43

Thus fear or uncertainty is not a legitimate reason to refuse an assignment and used alone as a basisfor refusing to float is considered unprofessional and may subject the nurse to the legal consequencesof abandonment.

On the other hand, nurse managers and supervisors have a responsibility to appropriately staff thenursing units and when resources are limited must critically appraise the circumstances and carefullydistribute personnel, striving to match the needs of the patients with the skills of the nurse. As indi-cated earlier, the supervisor, whether formally designated as such, or a staff nurse, who fails to assignand supervise appropriately, may be found negligent.

Following the Chain of Command

A nurse who fails to question an order of a patient when he or she believes that it is not in the best in-terest of the patient may be liable. Furthermore, nurses are responsible to contact a supervisor when aphysician fails to take appropriate action or is unwilling to cooperate in a situation that threatens thewell-being of a patient. Organizations should have a policy and procedure that clearly defines the chainof command. However, policy alone is not sufficient. Nurses need to be educated on their responsibil-ity to notify an individual in authority to assist with unresolved or threatening situations. Commonly,by referring unusual or difficult situations to a higher level, action can be taken that can protect a pa-tient’s well-being. Therefore it is important to recognize that the nurse’s duty to a patient extends be-yond direct care and carries the responsibility of advocacy.

NURSES AND THE LITIGATION PROCESS

Nurses in an executive or manager role may be required to testify as a result of direct involvement inan alleged malpractice event, under the respondeat superior doctrine, or as the corporate representa-tive. The designation of a corporate representative occurs following notice or subpoena of the organi-zation to designate a person to testify on behalf of company policy. Staff nurses employed by the facility may be either personally named in a lawsuit or, more commonly, subjected to the litigationprocess as an agent of the facility. At any level, participation in the unfamiliar legal arena can be threat-ening and stressful. Figure 15-1 describes steps in the legal procedure. During the litigation process,communication between the attorney and client is considered privileged or protected by law and is in-admissible in court. However, if the client shares the discussion with others, the communication is nolonger protected and may be entered as evidence in court. Unfortunately, the “code of silence” can mag-nify the anxiety of those involved in a lawsuit and can intensify feelings of shame, guilt, or isolation ex-perienced by the defendants.44 Education and emotional support of nurses going through the long andfrightening litigation process is paramount.


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RISK MANAGEMENT

Risk management in health care serves to provide a safe and effective environment for patients, visi-tors, and employees, thus averting or decreasing loss to the institution.45 Identification, analysis, treat-ment, and evaluation of actual or potential hazards are the focus of risk management activities. Riskmanagement has its beginnings in the transportation industry, particularly in investigations into avia-tion and traffic accidents. The primary reasons for these investigations were to determine patterns orcausative factors in the accidents and then to eliminate, or at least control, as many factors as possible.Insurance carriers for institutions support risk management programs and commonly decrease the costof premiums for providers who implement practices that reduce liability.45

Risk Management Responsibilities

Most healthcare institutions today have used the services of a risk manager. Because of the diversity inthe size and organization of institutions, job descriptions of the risk manager vary considerably. Figure15-2 defines competencies of a risk manager. Important areas of responsibilities include loss preventionand reduction, claims management, financial risk, and risk regulatory and accreditation compliance.46

Loss Prevention and Reduction

Loss prevention and reduction is the largest category of risk management and includes the followingactivities:

• Institution of a system to identify risk exposure such as incident or occurrence reporting, establish-ment of a communication system for referrals, and review of medical records, patient complaints,

Risk Management 483

FIGURE 15-1 STEPS IN A LEGAL PROCEDURE

1. A lawsuit begins when a complaint is filed by the plaintiff. Frequently, multiple parties are named in alawsuit.

2. The insurance provider for the individual or entity is contacted and becomes involved in providing a legalteam. When more than one party is named in the lawsuit, unfavorably for the defense, finger pointingbetween defendants may occur, especially if the parties are insured by different insurance carriers.

3. The discovery phase is the time whereby attorneys of opposing sides seek to identify the facts of the casein preparation for the legal battle. The discovery process can be quite lengthy as opposing attorneys ex-change documents about the individuals, entities, policies, and medical records pertaining to the adverseevent. Depositions of fact and expert witnesses on both sides are taken during the discovery phase.

4. As the case unfolds, commonly, there are attempts by the opposing attorneys to negotiate a settlement.It should be noted that settling a case does not confer guilt and may be the least risky and less costly res-olution. The cost of the litigation process is high; thus settlement may be a reasonable compromise.However, some malpractice insurance providers may be reluctant to negotiate settlements for fear thatbargaining encourages frivolous lawsuits.

5. If the parties cannot resolve the issue through settlement, a trial date is set by the court. Evidence andtestimony is presented to a jury and a verdict is delivered.

6. Either side may appeal the decision of the court based on questions of law, not simple displeasure withthe verdict. The cost associated with litigation must be weighed in the decision to appeal a verdict.

Source: Author.

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and performance improvement data. Developing early warning systems is crucial to the investi-gation of events. Early notification of events provides an opportunity to conduct timely inter-views of involved parties and to secure medical records and malfunctioning equipment associatedwith the event.

• Development of policies and procedures that address key risk management areas, including con-fidentiality, informed consent, products recalls, and sentinel events

• Collaboration with quality management, nursing, medical staff, and infection control to promoteloss reduction strategies. The TJC recommends the integration of risk management and qualityassurance initiatives as a more efficient and cost-effective method for promoting quality andsafety. Performance improvement data can identify potential risk areas and form the basis for ac-tion plans to reduce adverse occurrences. Quality and risk prevention go hand and hand. A thor-


FIGURE 15-2 RISK MANAGER COMPETENCIES

1. Keep an up-to-date manual, including policies, lines of authority, safety roles, disaster plans, safetytraining, procedures, incident and claims reporting, procedures and schedule, and description ofretention/insurance program.

2. Update programs with changes in properties, operations, or activities.

3. Review plans for new construction, alterations, and equipment installation.

4. Review contracts to avoid unnecessary assumptions of liability and transfer to others where possible.

5. Keep up-to-date property appraisal.

6. Maintain records of insurance policy renewal dates.

7. Review and monitor all premiums and other billings and approve payments.

8. Negotiate insurance coverage, premiums, and services.

9. Prepare specifications for competitive bids on property and liability insurance.

10. Review and make recommendations for coverage, services, and costs.

11. Maintain records and verify compliance for independent physicians, vendors, contractors, and subcon-tractors.

12. Maintain records of losses, claims, and all risk management expenses.

13. Supervise claim-reporting procedures.

14. Assist in adjusting losses.

15. Cooperate with the director of safety and the risk management committee to minimize all future lossesinvolving employees, patients, visitors, other third parties, property, and earnings.

16. Keep risk management skills updated.

17. Assess the system for causes of errors and adverse events. Fix the system.

18. Use focus groups to identify unreported errors and adverse events. Eliminate punitive organizationalculture.

19. Prepare annual report covering status, changes, new problems and solutions, summary of existing insur-ance and retention aspects of the program, summary of losses, costs, major claims, and future goals andobjectives.

20. Prepare an annual budget.

Source: Author.

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ough study of sentinel events using a root-cause analysis can provide valuable lessons for the or-ganization. Aggregating and analyzing statistical data regarding quality and safety. These reportsare presented to various committees and used by others, including the organization’s board of di-rectors, to determine the institution’s risk for loss and to implement strategies to reduce exposureto liability.

• Coordination of education for staff on risk management issues• Participation in the contract review process

Claims Management

All claims activities are generally handled by the risk management department. These functions includeestablishing files of potential or actual claims, coordinating claims activities, including negotiation ofsettlements, and serving as a liaison to administration as to the status of claims.47 Claims managementcan be a time-consuming activity for a risk management department depending on the number andcomplexity of claims against an organization.

Financial Risk

A major concern of healthcare businesses is financial loss due to legal liability. Risk managers attemptto identify areas within the organization that may expose the institution to loss and estimate the poten-tial and size of loss for exposure. When an adverse event occurs, effort is made to reduce the severity ofloss through risk control strategies such as writing off hospital bills or personally meeting with the pa-tient or family representative to resolve the grievance. The JCAHO mandates disclosure of sentinelevents and other poor outcomes of care to patients and their families, when appropriate.48 Unfor-tunately, many clinicians and institutions are reluctant to openly discuss bad outcomes for fear that dis-cussion may be interpreted as an admission of guilt, even if not the case.49 Furthermore, healthcareproviders may incur legal obstacles with full disclosure.

In 2005, after the loss of a brother to a medical error, Doug Wojcieszak formed The Sorry Works!coalition. The coalition was formed based on this family’s experience. The coalition advocates that inthe event of medical error or negligence, the provider admits fault, provides the patient/family with anapology, explains plans to prevent the error from reoccurring, and offers fair compensation.50 If med-ical error was not found to be the cause of the unexpected outcome, the coalition recommends thatproviders, accompanied by legal counsel, conduct a meeting with the patient/family and explain whathappened and then apologize and offer empathy without acknowledging fault. Until safe systems aredeveloped in health care that foster learning from mistakes while continuing to underscore individualaccountability for wrongdoing, discomfort and debate about disclosure after an unexpected outcomewill continue.

Compliance with Regulatory and Accreditation Agencies

Risk management includes the duty to comply with regulatory and accrediting bodies, such as theOccupational Safety and Health Administration, Emergency Medical Treatment and Active Labor Act,Health Insurance Portability and Accountability Act, and TJC, among many others. Additional regula-tory activities may include mandatory reporting of deaths based on defined criteria to the coroner, com-pliance with safety codes, and requirements to report select incidents to state and federal agencies.51

Documentation

The medical record is an account of the patient’s experience during a healthcare encounter. The pri-mary purpose of the medical record is to accurately reflect in written form the medical and nursing care

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that a patient receives. It is important that nurses strive to document as accurately and timely as possi-ble. Contradictions, inconsistencies, and unexplained gaps in the medical records are difficult to defendduring litigation. It is recommended that documentation take place as soon after the occurrence as pos-sible and that a minute-by-minute recording is done during an emergency. When time is of the essence,which is quite common in a busy clinical setting, brief notes with times, interventions, and other rele-vant information should be written on a piece of paper and transferred to the medical records as soonas time permits.

The old adage “if it wasn’t documented, it wasn’t done” is a good guideline to use in practice, butthere is no legal basis for the premise. Every nurse knows that it is impractical for nurses to chart allnursing functions and patient care activities. To do so would leave many duties undone, possibly in-cluding patient care. However, when malpractice is alleged, the medical record is the primary source ofinformation for determining whether the standard of care was met. Furthermore, failure to documentappropriate information may be interpreted as a violation of the standard. In a New York case, Gernerv. Long Island Jewish Hillside Medical Center, an infant suffered brain damage after developing jaundice.Several events occurred that delayed diagnosis and treatment of the jaundiced condition, including thefact that the nurses failed to note the color of the baby’s skin in the record until the third hospital day.Judgment was in favor of the plaintiff partially due to failure to document the patient’s condition.52

Electronic documentation adds new dimensions of liability. Care must be taken to safeguard patientconfidentiality and unauthorized access to information with computerized systems. Policies must bedeveloped to protect computerized patient data and audits performed routinely to ensure that onlythose who have a “need to know” access records. Furthermore, nurses need to be fully educated to un-derstand that when documenting electronically, the exact time that data are charted in the computer iscaptured automatically. Most nursing computerized documentation programs allow nurses to manu-ally enter the time that an assessment or intervention occurs; however, when the time is different fromthe entry time, it may be difficult to explain the discrepancy in time. Therefore a procedure for late en-tries should be developed to guide staff on how to enter late entries. Finally, when implementing elec-tronic documentation, it is essential that organizations minimize the need for duplicate documentationto prevent confusion; thus point-of-care documentation is preferable, whenever feasible.

The medical record is sacred ground and should never be altered after an entry is made. If it is foundthat a medical record has been modified, destroyed, or falsified in any fashion, the act may be construedas an attempt to conceal or manipulate facts and, under such instances, is considered a felony or crim-inal offense.53 Moreover, manipulation of the record may be interpreted as malice in a medical negli-gence case and punitive damages may be awarded the plaintiff, even if the alteration of the record didnot directly cause harm.54 Figure 15-3 highlights a few tips for documentation.

Policies and Procedures

Policies and procedures are directives for the daily operations of an institution and are required forcompliance with regulatory and accreditation agencies. Policy and procedure manuals are developed asa resource tool for employees to describe the general rules of conduct but are never intended to super-sede the judgment of the employee. If a patient experiences an adverse outcome, the plaintiff ’s attor-ney ordinarily petitions the institution’s policies and procedures to evaluate whether the practitioner’sconduct was in compliance with the established internal practices.

Policies and procedures are expected to be followed unless there is a reasonable explanation as towhy a deviation should occur. Plaintiff attorneys frequently argue that internal policies and proceduresform the basis for the standard of care. However, “a policy and procedure manual is not necessarily thedefinitive source for standards of care.”55 Nevertheless, policies and procedures find their way intocourt rooms every day. For this reason, each version of a policy should be retained when revisions are


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made because often in lawsuits an organization is asked to produce the policy in effect at the time ofthe incident. Unfortunately, institutions may be remiss in ensuring that policies are updated timely andthat the content reflects reasonable expectation rather than op-timal practice. Organizations must be careful not to developpolicies that specify conduct greater than recognized by author-ities. This practice could result in the institution being held to ahigher standard than the norm. Thus policies and proceduresshould be based on the best evidence and consistent with na-tional standards.

This requires vigilance on the part of the organization to at-tend to details in the development, ongoing review, and revisionof policies and procedures.57 Finally, policies and proceduresshould be broad enough to allow for reasonable flexibility be-tween departments and practitioners.

Incident/Occurrence Reporting

An incident or occurrence report is an effective tool used to identify potential losses, opportunities, orpotential claims. These reports are prepared for any unusual occurrence or near miss involving peopleor property, whether or not injury or damage occurs. Preferably, the report is generated at the time ofthe incident and by the individual(s) involved in the incident. However, if this is not possible, the inci-dent report should be completed when it is first discovered.

Use of Incident Reports

Incident reports are used to collect and analyze future data for the purpose of determining risk-controlstrategies. Blake describes the use of a multiple causation model in incident report investigation. Thistheory suggests that causes, subcauses, and contributing factors weave together in particular sequencesto cause incidents. An incident may have many concomitant causes; therefore seeking out as manycauses as possible and rating them by their proximate or primary influence on the incident may be use-ful in reducing the chance of the incident recurring. Proximate causes are often referred to as parentand closest cause of the incident. Primary causes are procedural in nature, and such causes are discov-ered through back tracking from the proximate cause.58

Risk Management 487

FIGURE 15-3 TIPS FOR DOCUMENTATION

• Never use the medical record as a forum to record complaints against another.

• Document instructions given to patients.

• Any corrections to the medical record should be done with a thin line drawn through the original entry,dated and initialed unless otherwise specified by hospital policy.

• Documented information should be factual and objective.

• Specific communication with physicians about the patient’s condition should be recorded.

• Late entries should be recorded according to the facility’s policy.

Source: Author.

“ The American Nurses Association definesevidence-based practice as “a process foundedon the collection, interpretation, and integra-tion of valid, important, and applicablepatient-reported, clinician-observed, andresearch-derived evidence. The best availableevidence, moderated by patient circumstancesand preferences is applied to improve the qual-ity of clinical judgments.” 56

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Preparation of Incident Reports

Incident reports are commonly discovered during the legal process. Discoverability of incident reportsdepends on “state Quality Assurance and peer review statutes or statutes creating an attorney-client orinsurer-insured privilege.”59

Contents of incident reports may be either helpful in explaining facts of a case or incriminating.Commonly, defending attorneys argue against discovery, asserting that occurrence reports are part ofthe quality assurance process and must be protected to afford organizations the opportunity to assessand improve care without fear of legal exposure. In Columbia/HCA Healthcare Corp. v. Eighth JudicialDistrict Court, the court ruled that because incident reports are part of the hospital’s normal course ofbusiness, they remain open to discovery during the litigation process.60 Incident reports should be ob-jectively written, complete and factual. The incident report is corrected in the same manner as anyother medical record and should not be altered or rewritten. It should contain no comments criticiz-ing or blaming others. Figure 15-4 lists the dos and don’ts of incident reporting.

It may be institutional policy to send the incident report to the risk manager; however, if the eventrequires immediate attention, notification may need to be more prompt. The preparer can call the riskmanager and nurse manager and give them verbal information on the need to investigate and evaluateevents and to make needed corrections. To accomplish this, managers should establish a climate of trustthat supports incident reporting by nurses. The TJC requires that incidents be reported.


FIGURE 15-4 DOS AND DON’TS OF INCIDENT REPORTING

Do

• Report any event involving patient mishap orserious expression of dissatisfaction with care.

• Report any event involving visitor mishap orproperty.

• Be complete.

• Follow established policy and procedure.

• Be prompt.

• Act to reduce fear in the nursing staff.

• Correct in the same manner as any medical record.

• Include names and identities of witnesses;record their statements on separate pages.

• Report equipment malfunctions, including con-trol numbers. Remove equipment from servicefor testing.

• Keep the report confidential.

• Report to nurse manager.

• Confer with risk manager.

• Work to provide nursing care to meet estab-lished standards.

• Attend all staff development programs.

• Confirm all telephone orders in writing.

Don’t

• Place blame on anyone.

• Place report on the patient’s chart.

• Make entry about an incident report on the pa-tient’s chart.

• Alter or rewrite.

• Report hearsay or opinion.

• Be afraid to consult, ask questions, or completeincident reports. They can be part of your bestdefense and protection.

• Prescribe in the physician’s domain.

• Be cold and impersonal to patients, families, orvisitors.

Source: Author.

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Risk Management and Nursing

Nursing leaders of today must challenge old practices and strive to build a culture of safety. Increasingdemands for services and the rising cost of health care accompanied by diminishing reimbursement re-quires patients to move through the healthcare system quicker than ever before. The rapidity of patientturnover increases the chance of error and leaves potential gaps in communications. Further compli-cating the working conditions is the increase in patient acuity, high staff turnover, long work hours, in-creased interruptions and demands, and rapidly changing technology.61 Moving from a culture ofblame to one of safety begins with identifying the reason for errors rather than focusing on the indi-vidual making the error.62 As the largest group of healthcare providers and those in closest contact topatients, nurses are in key positions to identify errors and to initiate measures to protect those theyserve. However, studies indicate errors to be significantly underreported by nurses.63 Improving sys-tems that encourage reporting and ensure anonymity is necessary to identify and address safety issues.Safe working environments are built on open communication, properly prepared employees who arecompetent in performing required duties, adequate resources, and an infrastructure that allows staff toperform work successfully.64 Lessons from other industries must be incorporated into health care. Theaviation industry has created a culture of safety by closely monitoring the hours worked by pilots, re-designing systems, and promoting teamwork and communication to prevent errors.

Figure 15-5 lists innovative initiatives recently used to improve patient safety, and Figure 15-6 listsstrategies to reduce malpractice claims. There is still much work to be done to ensure delivery systems

Risk Management 489

FIGURE 15-5 PATIENT SAFETY INITIATIVES

• Development of rapid response teams (RRTs). As part of the Institute for Healthcare Improvement’s cam-paign to save 5 million lives hospitals throughout the country have implemented RRTs to rescue medical-surgical patients from impending crisis. Studies have demonstrated a significant reduction in morbidityand mortality of hospitalized patients.65

• Implementation of communication models for reporting such as SBAR (situation, background, assessment,and recommendation)

More than 60% of sentinel events reported to JCAHO identified communication as a root cause of theevent.66

• Improvement of medication delivery systems including the use of bar coding. The Institute of Medicine re-ported that adverse drug events are the most common reason for medical errors and cost hospitals morethan $20 billion per year.67

• Implementation of processes to improve the work environment such as transforming care at the bedside(TCAB). As many as 35% to 40% of unexpected hospital deaths occur in hospital medical-surgical units.TCAB projects sponsored by the Robert Wood Johnson and Institute of Healthcare Improvements aim todramatically improve care on medical-surgical units by redesigning workspace, enhancing efficiency andreducing waste.68

• Development of teamwork. In the airline industry, “crew resource management” is a strategy to facilitatethe team of flight attendants, pilots, and other crew.69 Roles and responsibilities are clearly defined fornumerous scenarios to ensure safety. This model is being used in some healthcare organizations such asobstetrical units where staffs “practice for emergencies.”

• Development of clinical guidelines to promote standardization of care. A study of obstetrical patients in-dicated that when care failed to follow establish clinical guidelines, there was a sixfold increase in litiga-tion cases.70

• Development of high-performing microsystems. High-performing microsystems yield better outcomes andeffective care at lower cost and produce a more satisfying work environment.71

Source: Author.

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that are safe and effective and require commitment of the mass. Leaders must be willing to give powerto others and trust in the skill and wisdom of the whole. The legendary management consultant PeterDrucker once said, “The leaders who work most effectively, it seems to me, never say ‘I.’ And that is notbecause they have trained themselves not to say ‘I.’ They don’t think ‘I.’ They think ‘we’; they think ‘team.’They understand their job is to make the team function. They accept responsibility and don’t sidestep it,but ‘we’ gets the credit. This is what creates trust, what enables you to get the job done.”


FIGURE 15-6 STRATEGIES TO REDUCE MALPRACTICE CLAIMS

1. Ignorance of the law is not an excuse for wrongdoing. If a law exists but a person does not know it,that person will not be excused for breaking it.

2. Every person is responsible for his or her own actions. The nurse must know the cause and effect of allactions or will be subject to suit for malpractice when harm occurs to a patient.

3. A nurse will not carry out an illegal order of a physician or any other healthcare provider. The nursemust know that the order is a legal one before carrying it out.

4. New nurse graduates must not be assigned to duties beyond their competence.

5. An employer hiring a nurse is required to exercise ordinary, prudent policies and procedures.

6. By the “respondeat superior” or “master–servant” rule, injury by an employee because of negligencemakes both employee and employer equally responsible to an injured party. The injured party may sueboth employer and employee. Both may not necessarily be found guilty.

7. Professional nurses should carry malpractice insurance. Even when an employer insures an employee,the licensed employee is usually not covered outside the place of employment.

8. Malpractice litigation can be reduced by documenting telephone advice to patients, improving commu-nication and listening skills, and effectively obtaining patients’ informed consent.

9. Malpractice risks are increased when professional nurses supervise unlicensed employees.

10. Knowledge of state laws, such as mandatory reporting of abuse, is important for nurses.

11. Courts have interpreted ERISA (Employee Retirement Income Security Act) to limit physician autonomy andsubordinate clinical decision making to cost-containment decisions made by managed care organizations.

12. Good provider–patient relationships contribute to preventing malpractice suits.

13. Iatrogenic injuries are a significant public health problem that must be addressed by professional nurses.

14. The costs of malpractice litigation can be reduced by managing risks rather than vindicating providers ac-cused of malpractice. Successful risk management techniques include credentialing of professional staff,monitoring and tracking of complaints and incidents, and documenting in the patient’s medical record.

15. The medical malpractice field appeared in the United States around 1840 and has been sustained bychanging pressures on medicine, adoption of uniform standards, the advent of medical malpractice lia-bility insurance, contingency fees, citizen juries, and the nature of tort pleading.

16. Human errors in clinical nursing practice are common and underreported.

17. With increased credentialing of advanced practice nurses in health maintenance organizations, therewill be increased liability for their employers and increased need for personal malpractice insurance.

18. The nursing profession appears to hold its licensees to safer standards than does the medical profession;therefore nurses are disciplined more often and more harshly than are physicians.

19. Personal involvement with patients places the professional nurse in jeopardy of legal action by the stateboard of nursing.

20. Many charting practices can help decrease the liability risks for nurses.

Source: Author.

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SUMMARY

There is an element of risk when practicing in the healthcare environment. Nurses and nurse leadersshould be familiar with the potential liability associated with their chosen nursing role. Civil, criminal,and corporate laws apply to certain aspects of health care. Familiarity and compliance with laws is nec-essary to protect the nurse from liability. Medical malpractice claims continue to escalate as consumersof health care become more informed and expectations rise. Today, the public is less trusting ofproviders and less forgiving of mistakes. Good communication and rapport between providers and re-cipients of care accompanied by quality and safety measures are essential to decrease the incidence ofmalpractice claims. The litigation process is generally foreign territory for the nurses at any level ofpractice. Education and support is required to help the nurses through the lengthy and threatening ex-perience of litigation. Risk management activities can identify potential risk for the organization andimplement strategies to improve the safety and quality of care. Nurse leaders are responsible to ensurethat risk management principles are practiced in the workplace.

Summary 491

Evidence-Based Practice 15-1

Sivell et al. reported on the significance of assessing risk as it relates to genetic screening. Per the

researchers, as an individual perceives genetic risk such may influence risk management decisions, un-

derscoring the need to understand the ways in which risk is constructed and interpreted. The authors sys-

tematically reviewed the literature, doing a narrative synthesis of 59 studies presenting data on the ways

in which individuals perceive, construct, and interpret their risk and the subsequent effects. Although

most studies assessed perceived risk from a quantitative perspective, the combined evidence noted that

individuals find risk difficult to accurately quantify, with a tendency to overestimate. According to the re-

searchers, rather than being a stand-alone concept, risk is something lived and experienced, and the

process of constructing risk is complex and influenced by many factors. Although evidence of the effects

of perceived risk is limited and inconsistent, there is some evidence that notes high risk estimations may

adversely affect health and lead to inappropriate uptake of medical surveillance and preventative mea-

sures by some individuals. A more focused approach to research is needed with greater exploration of the

ways in which risk is constructed, along with the development of stronger theoretical models, to facilitate

effective and patient-centered counseling strategies.72

APPLICATION EXERCISES

Exercise 15-1Interview a risk manager. How do the risk manager’s competencies compare with those outlined inFigure 15-2? What risk prevention strategies does the manager use? What has been the cost of lossescaused by negligence during the past year?

Exercise 15-2Examine the incident reporting program in a healthcare agency. What are the strengths? Weaknesses?How can it be improved?

Exercise 15-3Interview a nurse executive. Using the patient safety initiatives outlined in Figure 15-5, review with thenurse executive patient safety concerns and strategies used in his or her healthcare organization.

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Notes

1. Institute of Medicine. (2000). To err is human: Building a safer health system. Washington, DC: National

Academies Press.

2. Institute of Medicine. (2004). Keeping patients safe: Transforming the work environment of nurses. Washington,

DC: National Academies Press.

3. Studdert, D., Mello, M., & Brennan, T. (2004). Medical malpractice. New England Journal of Medicine, 350, 283.

4. Sharpe, C. (1999). Nursing malpractice: Liability and risk management (p. 5). Westport, CT: Reenwood

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5. Ibid., p. 17.

6. Agency for Healthcare Research and Quality. (2004). AHRQ’s patient safety initiative: Building foundations, re-

ducing risk. An Interim Report to the United States Committee on Appropriations (No. 4-RG005), p. 57.

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and negligence in hospitalized patients: Results of the Harvard Medical Practice study. New England Journal

of Medicine, 324, 370.

8. Localio, A., Lawthers, A., Brennan, T., Laird, N., Hebert, L., Peterson, L., et al. (1991). Relation between mal-

practice claims and adverse events due to negligence. Results of the Harvard Medical Practice study III. New

England Journal of Medicine, 325, 245.

9. Dodge, A., & Fitzer, S. (2006). When good doctors get sued (2nd ed., p. 6). Olalla, CA: Dodge & Associates.

10. Pozgar, G. (2007). Legal aspects of health care administration (10th ed., p. 47). Sudbury, MA: Jones and Bartlett.

11. Ibid., p. 137.

12. Ibid., p. 204.

13. American Nurses Association. (2005). The nurse’s role in promoting a culture of patient safety (p. 15). Silver

Spring, MD: American Nurses Association.

14. Health Resources and Services Administration. (2007). National Practitioner’s Data Bank. Retrieved January

3, 2008, from http://www.npdb-hipdb.hrsa.gov/npdb.html

15. Croke, E. M. (2003). Nurses, negligence, and malpractice: An analysis based on more than 250 cases against

nurses. American Journal of Nursing, 103, 58.

16. American Nurses Association. (2004). Nursing: Scope & standards of practice (p. 49). Silver Spring, MD:

American Nurses Association.

17. Sharpe, 1999, p. 33.

18. Studdert et al., 2004, p. 286.

19. Joint Commission on Accreditation of Healthcare Organizations. (2006a). Health care at the crossroads:

Strategies for improving the medical liability system and preventing patient injury (p. 2). Washington, DC.

20. Studdert et al., 2004, p. 287.

21. Joint Commission on Accreditation of Healthcare Organizations, 2006a, p. 1.

22. Studdert et al., 2004, p. 287.

23. Sharpe, 1999, pp. 6–7.

24. Ibid., p. 10.

25. Pozgar, 2007, p. 39.

26. Ibid., p. 54.

27. Ibid., p. 54.

28. Ibid., p. 62.

29. Lesnik, M., & Anderson, B. (1947). Legal aspects of nursing (p. 258). Philadelphia: Lippincott.

30. American Nurses Association. (2001). Code of ethics for nurses with interpretive statements (p. 16). Silver

Spring, MD: American Nurses Association.

31. Pozgar, 2007, p. 127.

32. Ibid., p. 161.

33. Ibid., p. 135.

34. Sharpe, 1999, p. 24.

35. West, J. (2001). Occupational and environmental risk exposures for health care facilities. In R. Carroll (Ed.),

Risk management handbook for health care organizations (3rd ed., p. 327). San Francisco: Jossey-Bass.


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36. Kearney, K., & McCord, E. (1992). A new era for hospital liability. Risk Management, 39, 31.

37. Institute of Medicine, 2004.

38. Joint Commission on Accreditation of Healthcare Organizations. (2006b). Licensed independent practitioners.

Retrieved January 5, 2008, from http://www.jointcommission.org/AccreditationPrograms/Hospitals/

Standards/FAQs/Surveillance+Prevention+and+Control+of+Infection/IC+Program/LIP_Health_Screening.

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40. Health Resources and Services Administration, 2007.

41. Havlisch, R. (2001). Emerging liabilities in partnerships, joint ventures, and collaborative relationships. In

R. Carroll (Ed.), Risk management handbook for health care organizations (3rd ed., pp. 327–328). San Francisco:

Jossey-Bass.

42. Pozgar, 2007, p. 136.

43. Sharpe, 1999, p. 48.

44. Larson, K. (2006). The psychological impact of malpractice: The lived experience. Nephrology Nursing Journal,

33, 140.

45. Pozgar, 2007, p. 454.

46. Sewick, J., & Porto, G. G. (2001). The health care risk management professional. In R. Carroll (Ed.), Risk man-

agement handbook for health care organizations (3rd ed., pp. 3–4). San Francisco: Jossey-Bass.

47. Ibid., 5.


49. Sage, W. (2003). Medical liability and patient safety. Health Affairs, 22, 28.

50. Wojcieszak, D., Banja, J., & Houk, C. (2006). The sorry works! coalition: Making the case for full disclosure.

Journal on Quality and Patient Safety, 32, 344–350.

51. Ibid., pp. 345–349.

52. Pozgar, 2007, p. 261.

53. Sharpe, 1999, p. 111.

54. Pozgar, 2007, p. 261.

55. Sharpe, 1999, p. 37.

56. American Nurses Association, 2004, p. 48.

57. Coben, M. (2001). Statutes, standards, and regulations. In R. Carroll (Ed.), Risk management handbook for

health care organizations (3rd ed., p. 101). San Francisco: Jossey-Bass.

58. Blake, P. (1984). Incident investigation: A complete guide. Nursing Management, 1, 37–41.

59. Davis, K. S., & McConnel, J. C. (2001). Data management. In R. Carroll (Ed.), Risk management handbook for

health care organizations (3rd ed., p. 126). San Francisco: Jossey-Bass.

60. Pozgar, 2007, p. 302.


62. American Nurses Association, 2005, p. 7.

63. Ibid.

64. Ibid., p. 15.

65. Institute for Healthcare Improvement. (2006). Rapid response teams. Retrieved January 5, 2008, from

http://www.ihi.org/NR/rdonlyres/6541BE00-00BC-4AD8-A049-CD76EDE5F171/0/RRTHowtoGuide.doc

66. Joint Commission on Accreditation of Healthcare Organizations. (2006c). Sentinel events. Retrieved January

5, 2008, from http://www.jointcommission.org/SentinelEvents/Statistics/


68. Institute for Healthcare Improvement. (2003). Transforming care at the bedside. Retrieved November 19, 2007,

from http://www.ihi.org/IHI/Programs/StrategicInitiatives/TransformingCareAtTheBedside.htm

69. Joint Commission on Accreditation of Healthcare Organizations, 2006, p. 4.

70. Ibid.

71. Ibid., p. 5.

72. Sivell, S., Elwyn, G., Gaff, C., Clarke, A., Iredale, R., Shaw, C., Dundon, J., Thornton, H., & Edwards, A. (2008).

How risk is perceived, constructed and interpreted by clients in clinical genetics, and the effects on decision

making: Systematic review. Journal of Genetic Counseling, 17, 30–63.

Notes 493

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